561 factories in Thailand shut their doors in 2024
Steel and metal industries are hit hardest as production costs remain high and cheap Chinese goods flow into the market
Thailand is facing a surge in factory closures, with 561 factories shutting down this year, primarily in the steel and metal industries. The Federation of Thai Industries (FTI) warns that if production costs, including energy, transportation, and interest rates, remain high, more closures are likely. The FTI is urging the government to take immediate measures to support businesses.
ML Peekthong Thongyai, the federation’s vice chairman, said the FTI is closely monitoring the ongoing trend of factory closures. According to data from the Department of Industrial Works, 561 factories closed between January and May, resulting in 15,342 job losses, averaging about 3,000 jobs per month.
These included 12 plastic factories, 11 metal factories, and 8 wood processing factories. Continuing high production costs, including interest rates, are raising concerns that more closures may follow. The FTI is urging the government to implement additional measures to support business operators. However, businesses must also adapt and find ways to reduce costs.
Over the past two years, low-priced goods have flooded the market, intensifying competition. The United States and Europe have imposed trade barriers on Chinese goods, but China continues to produce at high levels, with these goods finding their way to the Thai market, making it difficult for Thai businesses to compete.
Data shows that 678 factories closed in 2021, 997 in 2022, and 1,337 in 2023, an increase of 60% from 2022.
Nawa Chantanasurakon, also vice chairman of the FTI, expressed concern that the current economic situation could lead to more business closures, with the trend worsening compared to the past two years. This is due to ongoing trade conflicts between the US, the EU, and China, as well as the ongoing influx of low-cost goods into the ASEAN region.
